Investing.com - The U.S. dollar fell to more than two-week lows against the Canadian dollar on Friday after U.S. jobs data for August fell short of expectations, while unexpectedly strong jobs data boosted the Canadian dollar.
USD/CAD fell as low as 1.0380, the lowest since August 20, before paring back some losses to settle at 1.0403, ending the day 0.89% lower and finishing the week with losses of 1.34%.
The pair is likely to find support at 1.0334, the low of August 20 and resistance at 1.0504, Friday's high.
The Department of Labor said the U.S. economy added 169,000 jobs in August, fewer than the 180,000 forecast by economists.
The unemployment rate ticked down to a four-and-a-half year low of 7.3% from 7.4% in July, but this was partially due to more people dropping out of the labor force.
The report also said that job growth in July was revised down to 104,000 from 162,000, while June's figure was revised down to 172,000 from 188,000.
The soft data curbed expectations that the Federal Reserve will start to unwind its USD85 billion-a-month asset purchase program at its upcoming policy meeting on September 17-18.
Fed Chairman Ben Bernanke has said that the decision to begin tapering will depend on whether economic data is strong enough.
The Canadian dollar strengthened after Statistics Canada said the economy created 59,200 jobs in August, easily outstripping forecasts for jobs growth of 20,000. The rate of unemployment edged down to 7.1% last month from 7.2% in July.
The report said part-time employment in Canada rose by 41,800 in August, with full-time employment increasing by 17,400.
In the week ahead, the dollar looks likely to remain under pressure ahead of the outcome of the Fed's upcoming policy meeting later in the month. Investors will be looking ahead to Friday's U.S. data on retail sales and consumer sentiment for indications on the strength of the economic recovery.
Canadian housing sector data will also be in focus.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets. The guide skips Tuesday and Wednesday as there are no relevant events on this day.
Monday, September 9
Canada is to publish government data on building permits, a leading indicator of future construction activity.
Thursday, September 12
Canada is to release official data on new house price inflation, an important indicator of demand in the housing sector.
The U.S. is to release the weekly government report on initial jobless claims, a leading economic indicator, as well as official data on import prices.
Friday, September 13
The U.S. is to round up the week with reports on retail sales and producer price inflation, as well as preliminary data from the University of Michigan on consumer sentiment.
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